| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 01:30 | China | Non-Manufacturing PMI | January | 52.2 | 52.1 | 50.2 |
| 01:30 | China | Manufacturing PMI | January | 50.1 | 50.1 | 49.1 |
During today's Asian trading, the US dollar rose moderately against major currencies, while market participants continue to assess the impact of Donald Trump's tariff plans and prepare for the January Fed meeting.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.25% to 107.71 amid increased tariff risks between the United States and Colombia. Last week, the index fell by 1.74%, recording the largest decline since mid-November 2023. A Trump threat of tariffs on Colombia to punish it for refusing to accept military flights carrying deportees prompted the government in Bogota to threaten retaliatory tariffs. However, the US government later said that Colombia had agreed to accept military aircraft carrying deported migrants. As for the Fed meeting, experts expect the Central Bank to leave interest rates unchanged after cutting them at each of the last three meetings. Economic growth was strong at the beginning of 2025, and inflation turned out to be less favorable than the FOMC would have liked. Comments from many Fed officials highlighted the risks of further policy easing, given that PCE inflation remains at 2.4% year-on-year and core PCE inflation is 2.8%. Although the risks to the inflationary side of the Fed's dual mandate remain clear, the risks to the employment mandate have decreased slightly compared to a few months earlier. The unemployment rate decreased by 0.1% in December, to 4.1%, and nonfarm payrolls growth exceeded 200,000 in each of the last two months. As for the outlook, the Fed is likely to stick to current policy settings in the first half of the year. Then two rate cuts of 25 basis points are expected during the meetings in September and December.
The Chinese yuan fell 0.3% against the US dollar amid disappointing Chinese PMI data. China’s manufacturing activity unexpectedly contracted in January, reversing three months of growth and falling below the 50-point threshold that separates expansion from contraction. The official manufacturing PMI dropped to 49.1 from December’s 50.1, missing the forecast of 50.1, the National Bureau of Statistics (NBS) reported on Monday. China’s non-manufacturing PMI, which tracks services and construction activity, also weakened, dropping to 50.2 from 52.2 in December. While services PMI slightly expanded to 50.3 due to holiday-driven demand in sectors like public transportation, hospitality, and food services, the construction PMI declined to 49.3, reflecting a pre-festival slowdown. The composite PMI, combining manufacturing and services, stood at 50.1, down from December’s 52.2. Meanwhile, profits at China’s industrial firms fell 3.3% in 2024, extending a 4.7% decline recorded during the January-November period. However, December saw a surprising 11% year-on-year profit growth, rebounding from a 7.3% drop in November.